Individual Learning Accounts (Hansard, 13 May 2003)

§ Baroness Blatch
asked Her Majesty's Government:
What progress is being made on the investigation into individual learning accounts.

§ The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)
My Lords, the department's special investigations unit has been asked to investigate 157 learning provider organisations. The police are investigating 98 of those cases. There have been 71 arrests, which have resulted to date in six people being convicted, nine people accepting cautions and one other awaiting a court appearance.

§ Baroness Blatch
My Lords, this has been the most scandalous waste of public money. The department has been found wanting and yet there has been no apology and to date no proper compensation for genuine providers. What are the Government going to do about it?

§ Baroness Ashton of Upholland
My Lords, first, on behalf of the Government, we do apologise for this. Indeed, when he appeared before the Public Accounts Committee the Permanent Secretary said: this is a very bad story … I am very sorry for it too, and we have to put it right". So, I believe we are quite clear in apologising.
The noble Baroness will be aware of the Ombudsman cases. As a consequence of those we shall be writing to a number of learning providers. I believe we have written to 179 and will be writing to some 3,000 in June inviting claims from those who have had similar experiences to those covered in the Ombudsman cases. We have written to 20,000 learners to seek out those who may 130 have had similar experiences to those outlined by the Ombudsman. I do believe that we have already made some inroads into sorting this out.

§ Lord Hughes of Woodside
My Lords, my noble friend has frequently accepted the responsibility of the department for failings and shortcomings. Would it not be better if the Opposition, who continually raise the matter, were for once to condemn the crooks rather than pretend that what happened was a result of the department's failings?

§ Baroness Ashton of Upholland
My Lords, my noble friend makes an important point. These investigations are about fraud. I am sure that the noble Baroness. Lady Blatch, and other noble Lords will be fully aware that the nub of the matter is to ensure that we bring to justice those who have defrauded us.

§ Baroness Sharples
My Lords, can the Minister tell the House how much this has cost so far and what will be the projected costs of this débâcle?

§ Baroness Ashton of Upholland
My Lords, the department has spent £273 million on the programme. As noble Lords will know, there was a very high take-up of individual learning accounts. Indeed, the satisfaction rates for those involved are extremely high—independent research would suggest 91 per cent. The overspend on the programme is £74 million and our forecast for the final overspend for the two years is £93.6 million. Based on the estimates and extrapolations, the fraud and serious irregularities may be up to some £67 million, a figure I have given before in your Lordships' House.

§ Baroness Blatch
My Lords, does the Minister accept that I hold no brief for the people who have been fraudulent in this case but that I do hold a brief for the genuine recipients of the courses and the genuine providers of the courses? The way in which the department set up the scheme allowed not only for fraudulent activity to take place but for it to take place over such a long period that millions of pounds have been lost to the taxpayer. That precious money could have gone to our schools, which are badly in need of it.

§ Baroness Ashton of Upholland
My Lords, I appreciate that the noble Baroness holds no brief. I am sure that she would join me in wholeheartedly condemning those who have defrauded the system. I accept that entirely. The timescale of events shows that in May 2001 we recognised that we had met our commitment to get into the system the number of learners we wanted. We recognised that there were severe issues by the end of October and the scheme closed down in November. With the information we received, I believe that we acted with all possible speed.

§ Baroness Sharp of Guildford
My Lords, does the Minister accept that the principle behind the scheme, which was to provide a means of helping adult learners into courses on a part-time basis, was a good one? At 131 one point there was a proposal that such a scheme should he resumed. Can the Minister inform the House as to when we are likely to see a scheme introduced by the department which, it is to be hoped, will he totally fraud free?

§ Baroness Ashton of Upholland
My Lords, on the last occasion that such a question was asked my noble friend Lord Davies stated that we intend to come forward around June with new proposals for a scheme which will indeed meet the worthy objectives outlined by the noble Baroness.